KUALA LUMPUR: PKNS Holdings Sdn Bhd is not selling its 30% stake in the PJ Sentral development, which is a subject of a legal suit between the state government- backed entity and Nusa Gapurna Development Sdn Bhd (NGD).
“There has been no approach by, or discussion with, any party regarding the possible sale of a 30% stake in PJ Sentral Development Sdn Bhd to NGD," PKNS said in a statement yesterday.
PKNS came out with the statement following reports that it was willing to sell its 30% stake in PJ Sentral Development (the developer of the PJ Sentral project in Petaling Jaya).
Last month, shareholders of Malaysian Resources Corp Bhd (MRCB) had approved the acquisition of property development land and other assets belonging to NGD in a RM729 million deal. NGD's 70% interest in the PJ Sentral development was also part of the transaction approved.
But PKNS had, a day before the MRCB shareholders' meeting, filed a suit seeking to buy the 70% stake — claiming that they have the first right of refusal to buy the stake.
On its part, NGD has claimed that it has the right to “drag along" PKNS to any venture as long as the state owned entity does not get a worse off deal than the privately owned developer.
Pending the outcome of the suit, PKNS has filed for an injunction to stop NGD from selling its 70% interest in PJ Sentral to MRCB.
PKNS general manager Noor Hisham Ghouth told The Edge Financial Daily the legal suit filed against MRCB and NGD to stop the sale of the latter's 70% stake to MRCB was to exercise PKNS' pre-emptive right.
“We are not against the rest of the acquisition deal. We are just exercising our pre-emptive right. Lawyers on both sides have been consulted and we have received an affidavit from MRCB which we will be responding to by today," he said.
According to Selangor Mentri Besar Tan Sri Khalid Ibrahim, PKNS had offered to buy NGD's 70% equity interest in PJ Sentral at a higher price than what MRCB had offered.
NGD had served a “drag along" notice to PKNS on April 23 to compel PKNS to cooperate in the sale of its remaining 30% stake, valued at RM83.5 million.
MRCB's offer price for the PJ Sentral asset was RM199 million, a 11% discount to that offered by PKNS.
MRCB is pushing for the acquisition to enhance its total landbank. NGD has had a working relationship with MRCB since 2009, when the two companies jointly developed a tract in Kuala Lumpur Sentral for Shell.
The High Court of Kuala Lumpur has fixed July 22 as the hearing date for the injunction application by PKNS against MRCB.
PJ Sentral sits on 12 acres (4.85ha) of prime land in Petaling Jaya and is estimated to have a gross development value of RM3 billion.
It is a commercial development that has received approval for office buildings and a hotel. It was privatised when Selangor was under the Barisan Nasional.
Under the initial terms, NGD was to build an office block for PKNS and pay some cash in return for taking over the land.
However, since Pakatan Rakyat took over Selangor, PKNS has re-negotiated the terms of the privatisation several times until it ended with 30% of the entire development.
“We definitely have the capability to develop PJ Sentral on our own. We have been developing our own property for many years now.
“We've even been developing premium properties since the early 2000s," said Hisham, when asked about PKNS' ability to develop the land.
This article first appeared in The Edge Financial Daily, on July 12, 2013.
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